Canon are rumored to be working on a new codec for the 5D Mark III based on the MPEG format. It is the DSLR version of the codec used in the XF305.
It will feature a 4-2-2 colour space and a variable bit rate, up to 50mbit. The move is necessary to avoid paying AVCHD / H.264 licensing fees to Panasonic and Sony.
Tim Smith alluded [Cinema5D got it first] to the new codec earlier in the year and several sources have also hinted at it directly.
4-2-2 colour sampling will be a great boost for DSLRs and it pairs well with the 14bit A/D converters on the sensor, delivering more lifelike colour and smooth gradated tones. For example in the sky between subtle shades of blue, which currently look like distinct bands of blocky colour, with about 8 shades left after heavy compression. It will be so great to get smoother transitions again, like in RAW stills.
The codec will basically be a slightly improved version of the XF codec, first developed for the XF300 and XF305 professional camcorders which are based on MPEG-2. Here is how Canon described that codec:
“[The XF305] uses the Canon XF Codec for extreme color detail required for accurate chroma-keying, color-grading and compositing for digital filmmaking. For finer transitions in tone and color, 4:2:2 color sampling offers twice the color resolution of HDV and other 4:2:0 formats.”
Since Apple and Adobe have already taken up the format, we can also edit natively without transcoding to ProRes which is a great advantage.
The codec is also broadcast certified, by the BBC, etc.
Currently the 5D Mark II uses a MPEG-4 AVC H.264 based codec in a Quicktime wrapper, which is rather CPU intensive and only has a 4-2-0 colour space.